Knowledge Adventure

Knowledge Adventure
David Lord, CEO
TeleSoft Partners Annual Meeting
October 8th, 2009
Foster City, CA
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KA Executive Team
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David Lord, President and CEO
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CEO of RazorGator and Toysmart.com
Thomas Swalla, President Online
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VP of Business Development & Corp Development at RazorGator
Product Manager at Authentify
Jim Czulewicz, VP Business Planning & Analysis/Retail Sales
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VP Sales and Administration at The Learning Company (4.5 yrs)
VP Financial Planning and Analysis at Riverdeep (5 yrs)
VP Merchandising at Broderbund (5 yrs)
Paul Jordan, VP Operations
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VP Operations at Softbank Services Group and Alexander Lord
Sudhir Krishnaswamy, GM KA India and VP Engineering
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CTO of RazorGator, GM of RazorGator India
CTO Paciolan
Bill Kennedy, VP Finance and Administration
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VP of Finance and Administration at Dunk.net
Director of Finance at Mattel Inc. (10+ years)
Lori Berget, Senior Producer
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Sr. Producer, Producer, Asst. Producer, Designer & QA at KA (14.5+ years)
Teacher at Middle School
JumpStart Production Team – Leadership with over 50 years experience developing top kids
games for over 10years. Total production experience over 200 years.
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Knowledge Adventure
Company History:
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Game designer, developer and publisher since 1991. Founded by Bill Gross & Idealab
Acquired in late 90’s by Davidson and ultimately by Vivendi
Spun out from Vivendi in 2004 by Azure Capital & TeleSoft Partners
2001/02 peak of 4-6mm units sold per year
New executive team and strategy in April, 2008
65 employees located in Torrance, CA
60+ employees located in Technology center in Bangalore, India
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Ages 3 -10
Over 15mm units sold
10 year history, hundreds of titles
Product line refreshed in 2008
40% retail market share
• Ages 8 and up
• Over 10mm units sold
• Demo skews toward boys
• 10 year history, 100’s of titles
• Over 30% market share
Additional brands include: Dr. Brain, PlayZone!, Dinosaur Adventure, Newton’s Quest, Puddle Books,
Speed Reader, Spell It, Syracuse Language Titles, Code Head, and Dino Battles (formerly Jurassic Park)
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Market Size
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Market Opportunity: Broadband Effect
Broadband Penetration Effect on Virtual Worlds/Online Gaming
Broadband
Penetration
Broadband
Penetration
Virtual Worlds/Online Gaming
Educational
PC Games GamingAll PC Games
Virtual World/Online
2,500
3,000
60.0%
2,000
2,500
50.0%
1,500
2,000
40.0%
1,000
1,500
30.0%
1,000
500
20.0%
Sources: PriceWaterhouseCooper, Pew Research
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20
11
20
10
20
09
20
08
20
07
20
06
20
05
20
04
(0)
(500)
20
03
0.0%
20
02
-500
20
01
10.0%
20
00
Broadband Penetration
70.0%
12
20
US $$ fromUS
Virtual
SalesWorlds/Online
(In Millions) Gaming
($$ millions)
3,000
3,500
80.0%
Kids Market Opportunity
Video Game Market ($$ millions)
Platform
2003
Console/Handheld Games
5,794
Online Games
360
Wireless Games
137
PC Games
1,206
Educational Games
207
Total KA Opportunity
7,704
2004
2005
6,242 6,017
559
821
294
382
1,105
950
155
132
8,355 8,302
Video Game Market Growth
Platform
Console/Handheld Games
Online Games
Wireless Games
PC Games
Educational Games
Total KA Opportunity
2004
7.7
55.3
114.6
(8.4)
(25.1)
144.1
(%)
2003
5.3
65.1
104.5
(13.9)
(24.5)
136.5
2005
(3.6)
46.9
29.9
(14.0)
(14.8)
44.4
2006
2007
2008
2009
2010
6,462
8,639
9,688 9,945 10,205
1,104
1,425
1,771 2,089 2,398
507
641
771
893 1,007
969
909
893
874
855
126
105
96
91
87
9,168 11,719 13,219 13,892 14,552
2006
7.4
34.5
32.7
2.0
(4.5)
72.1
2007
33.7
29.1
26.4
(6.2)
(16.7)
66.3
2008
12.1
24.3
20.3
(1.8)
(8.6)
46.3
2009
2.7
18.0
15.8
(2.1)
(5.2)
29.2
2010
2.6
14.8
12.8
(2.2)
(4.4)
23.6
2011
2012
10,468 11,745
2,677
2,893
1,116
1,225
835
789
82
15,178 16,652
2011
2.6
11.6
10.8
(2.3)
(5.7)
17.0
2012 2008-12 CAGR
12.2
6.3
8.1
15.2
9.8
13.8
(5.5)
(2.8)
24.6
32.5
Sources: 2009 PriceWaterhouseCooper, Entertainment Software Association
US Child and Teen Internet Users who visit
Virtual Worlds- In millions and % of total internet users
age 3-17:
Source: eMarketer.com
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JumpStart Uniquely Positioned to Maximize
Growth
KA’s Opportunity
•Leverage brand
online
•Proven retail
distribution model with
a “virtual/membership”
product
• Jumpstart has over
30% market share in
current retail market
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Go-To-Market Strategy
• Transition Business to High Growth, High Margin Market
Segments
– Online virtual worlds & online gaming
• Launch jumpstart.com 12/1/08
• Subscription Model (monthly $7.95, annual $74.95)
• Engaging game play grows lifetime value
– Console/Wii, DS
• JumpStart Pet Rescue for Wii (4-6), 9/1/09, first kids learning title
(Nintendo)
• JumpStart Escape from Adventure Island (6-9), 12/1/09
• MathBlaster DS product launched spring 2009
– Build Platform for multiple brands (vertical brands built on platform)
• Technology investment to leapfrog current flash standard – 3D
• Single development tree (Unity game engine)
– International growth
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Competitive Advantages
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JumpStart Brand Equity
– Sold over 15mm units of JumpStart products
– Brand equity created in characters and adventures
– Respected and trusted by parents due to learning gameplay
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Retail Distribution
– Customer acquisition costs are extremely low due to retail distribution
– Ability to expand distribution by expanding product offerings
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Online virtual world will be delivered in 3-D through a web browser
– The user experience and game engine significantly enhance
gameplay and lifetime value of a customer
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JumpStart’s virtual world contains age specific content
– Jumpstart has invested in creating content in the world that is
specifically for certain ages (learning content, adventures, missions, etc)
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Recent Milestones
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Launched online 3-D World at JumpStart.com on Dec 1st. Only kids company to
deliver an immersive, engaging online 3-D environment that allows kids to deeply
engage with the company’s brand
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Avatar creation
Deep age specific gameplay content
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Several casual games
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Dunebuggy, Ghost Town Grab, Robo-a-gogo, Dodgebot,
MMO
High Scores
Hall of Fame with achievements and ranks
Earn coins and buy various items in stores
Movies, Music, Arcade
Nintendo Wii Publisher
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Storyland (ages 3 – 5)
Adventureland (ages 5 – 8)
Marineland (ages 5 – 8)
Launched JumpStart Pet Rescue (9/1/09 at WalMart, GameStop, ToysRUs, Best Buy, etc.)
Launching JumpStart Escape from Adventure Island at retail by 11/17/09
Made investment and built a Technology Platform that enables the creation of other
branded experiences via strategic relationships
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Leverage the technology investment to allows kids to engage with other brands in a similar
way as Jumpstart
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Product Roadmap
Holiday
2008
Holiday
2009
Total Net Sales
Holiday
2010
% of Revenue
100%
-Launch in 2-3 International Markets
-Fitness Title, Family & Mom All Ages
-JumpStart Racer, 4 & up
Other
Int’l
Online
Other
Int’l
Console
Other
Int’l
Console
-Enhance Main Street
-Improvements to Each Game/Modular
Online
CD
Products
-2 Console Titles (Age 3-6 & 6-9)
CD
Products
-Prepaid Time Cards
-PC Retail Products (age 3-8)
CD
Products
-Launch JumpStart VW
-Online Game (Age 3-5)
Product
Schedule
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50
Online
-Launch Online Gameplay
-3 Addt’l Online Games (Age 3-12)
FY09
*Fiscal Year is 4/1 through 3/31
FY10
FY11
Age and Gender of Online Users
(Registered Users)
Gender
Breakdown
Male
Female
12.0%
52%
Female
10.0%
48%
Male
Pct of Users
8.0%
6.0%
4.0%
2.0%
0.0%
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Age
13
Thru 9/13/2009
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2010 Membership Model
• Currently adding many thousands
of members monthly.
Retail Products
Members
60%
New
Members
40%
Online via JumpStart.com
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New Members
Thriving
Community =
Profitable Biz
Thank You
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